~ Tech, Code and the occassional stiff drink

Carriers Criminally Control Commerce

In recently breaking news, it was exposed that Verizon Wireless would be actively blocking Google Wallet from their soon to be released Galaxy Nexus phone. The reason for this move is to prevent Google Wallet from making traction while they develop a competing technology currently going by the name ISIS. In light of the soon to explode subject of Carrier IQ, the cellular carriers within the U.S. are patterning themselves as dangerous and likely criminal.

History has already shown that consumers in the United States have already been abused and mistreated by the carriers in virtually every possible way from overpriced plans and features to abusive and even predatory overage policies. Verizon themselves are infamously known for detrimentally modifying the handsets they sell to customers; for example, in 2008 they began selling the HTC Touch Pro, unlike the other 3 major carriers (and a couple of smaller ones) they ordered the handsets with half of the original RAM and initially released it at $50 more than anybody else. AT&T has done little to earn themselves a positive reputation after being exposed for attempting to buy T-Mobile for no better reason than removing competition in the market. If you’re looking for examples of how pricing is inexplicably high, simply look to any carrier in Europe where even the more expensive carriers make Sprint look costly and most of them are delivering higher call quality and reliability with data services that are far cheaper and faster.

The Carrier IQ scandal is only just heating up with lawsuits about to be filed against AT&T, T-Mobile and Sprint (along with HTC, Samsung and Apple) with the intention to elevate them to Class Action Status. For those who don’t know about Carrier IQ, the very short explanation is that there is software installed on many phones sold in the US that can log every keystroke, button press, phone call, website address (even those that are SSL encrypted) and more. The data being logged is being sent back to server farms and to date it’s unclear of how the data is stored and secured or how it’s being used. The various versions of the software has been discovered running on HTC, Samsung and Apple handsets from AT&T, T-Mobile and Sprint. So far nothing has been found on Motorola or Verizon handsets, however Verizon’s specifically qualified statement that they don’t run Carrier IQ has raised the question if they are merely using a different or custom made solution. While proof is still coming to the surface, it’s clear that the carriers are guilty of a major violation of privacy and security.

Update: Verizon is in fact using a similar app named Motricity to do their dirty work. Consider me unsurprised.

Google Wallet is now restricted by all of the carriers except for Sprint in favor of pushing their own version called ISIS. For those who haven’t heard of Google Wallet, the easy way to describe it is allowing people to use their phone like a credit card by passing it over sensors in a store and then authorizing the payment. This may sound like a small issue of little importance, remember that whoever is successful in this market will eventually provide their own payment method and become a major provider in the credit and financial world. The 3 major carriers (excluding Sprint) are trying to collectively build their service in hopes of excluding Google.

Cellular coverage is already a $50 Billion industry in the USA, and it’s not unlikely that these carriers will eventually try to spread this system overseas. Between installing spyware on the phones they sell to us, lying about policies, manipulating fine print in ways that would make the nations’ banks proud and joining in highly anti-competitive tactics…well I don’t much trust them to also get involved in the financial industry, especially when they are actively working to exclude their competitors. This actually is the definition of Anti-Trust and over half of the names involved are direct descendants of the broken up Ma’ Bell monopoly. While we need cell phones, technology, credit cards and other electronic payment, the least we deserve a choice of which ones we use. While I suspect there will soon be an online petition to push Verizon into allowing Google Wallet, and hopefully an DOJ investigation into the ISIS partners, at the very least I would urge people to complain to Verizon, AT&T and T-Mobile and request that they stop blocking Google Wallet on their “Nexus”-branded phones (and any phone that supports NFC).